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Analysis

10 Years of Super PACs Show Courts Were Wrong on Corruption Risks

It’s been a decade since the Supreme Court’s Citizens United ruling led to a lower court decision that created the super-PAC monster that gives the wealthy undue influence over politics.

March 25, 2020
stack of cash
Tim Robberts

Congress is on the brink of passing the biggest stimulus bill in history. The last time there was legislation like this, super PACs didn’t exist. Today, the campaign finance regulation system is in far worse shape, and wealthy donors can use their influence to try to obtain big payouts from the government.

Meanwhile, the influence of unlimited big money has already been affecting the 2020 election. The evidence is everywhere from one donor spending nearly $15 million through a super PAC backing one primary candidates to the presidential contenders arguing at a debate about accepting money from wealthy supporters through super PACs.

The law limits the amount one individual can donate directly to a campaign, in part because of fears that that type of transaction could lead to corruption. But wealthy donors are still able to exert immense influence over our political process, thanks in part to a federal appeals court decision 10 years ago this month that was based on the Supreme Court’s Citizens United ruling.

In SpeechNow v. Federal Election Commission, the DC Circuit Court of Appeals required the FEC to allow organizations to register as “independent expenditure only committees,” a status that lets groups raise unlimited money from donors. Millionaires, billionaires, and corporations skirt individual limits by donating to these groups, which we now know as super PACs.

The groups — which are often staffed by former employees of the candidates — throw their money and resources behind candidates or political causes favored by the wealthy donors. The process drowns out the voices of regular voters, giving the superrich a level of access to and influence over the political process that’s impossible for the vast majority of Americans to obtain. Examples abound over the last decade.

The most recent high-profile one involves Lev Parnas and Igor Fruman, two Ukrainian-American businessmen who used large contributions to a pro-Trump super PAC to get facetime with the president. They took the opportunity to advocate for the ouster of the U.S. ambassador to Ukraine, Marie Yovanovitch, a move they viewed as benefiting their own interests and those of another Ukrainian government official.

Or there’s the case of Jose Susumo Azano Matsura, a Mexican businessman interested in building a waterfront development in San Diego. He was convicted in 2016 of funneling $500,000 in illegal foreign money into a San Diego mayoral race to gain support for the project, using a shell company and super PAC to disguise the foreign source of much of the funds.

Real estate was also a factor one year later on the east coast, when former Miami Beach Commissioner Michael Grieco pleaded no contest to charges resulting from a scheme that involved secretly setting up his own super PAC and accepting disguised donations from a Norwegian citizen interested in developing properties in the city.

And just this month, North Carolina insurance magnate Greg Lindberg was convicted of attempting to bribe the state insurance commissioner to replace an official who was investigating a company Lindberg owned. The lion’s share of the payments — $1.5 million — went through a super PAC Lindberg had created for the purpose. He was caught on tape explaining how his donations to a super PAC would benefit the insurance commissioner’s campaign.

There are also cases where the influence of super PAC money was not outright illegal but has an appearance of corruption nonetheless.

When Congress was considering an unpopular tax reform package in 2017, Cory Bliss — the head of the Congressional Leadership Fund and close ally of House Speaker Paul Ryan — gave House Republicans an ultimatum: the group would not support members who voted against the bill. As the tax reform moved through Congress, senators and representatives were frank about their motivation to pass it to please donors. The Congressional Leadership Fund went on to be the highest-spending super PAC in 2018, shelling out $138 million in support of GOP candidates.

And in Washington, DC, supporters of Mayor Muriel Bowser were forced to shut down their super PAC when scandal erupted over big contributions from donors seeking business contracts with the district. One donor described giving to the super PAC this way: “If you want to continue to have good favor with the mayor, it is something you do.”

Just 11 donors have given $1 billion to super PACs over the years, and more than two-thirds of super PAC funding comes from donations of $1 million or more. Super PAC spending has sharply risen from $600 million in 2012 to over $1 billion in 2016.

Fortunately, powerful reform options are available. The key is public financing, which empowers regular people and the candidates they support to run competitive campaigns without seeking super PAC help. These programs match and multiply small donations with public funds, so that $50 from a constituent becomes worth $350 to the candidate, for example. The idea is not to eliminate big super PAC money, but to give candidates not supported by wealthy donors the resources to compete for office.

Public financing has seen success in several cities, from Los Angeles to New York City, where candidates raise most of their funds from small donors. The programs improve the connection between representative and constituent by rewarding retail fundraising in the community rather than ritzy fundraisers and wink-and-nod arrangements with super PACs. Several cities and counties have created public financing systems in response to Citizens United. A bill has also passed the House of Representatives. With every legislative advance, this reform can help our elections change course after a decade of super PACs.